TaxTMI 
TaxTMI 
2024 (8) TMI 116
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....of 44 days delay in filing the present appeal. 4. For the reasons stated in the application, the delay of 44 days in filing the appeal is condoned. 5. Application is disposed of. ITA 664/2023 6. The instant appeal is directed against the order of the Income Tax Appellate Tribunal ["ITAT"] dated 28 February 2023 and which has while considering the issue of disallowance of interest framed under Section 36(1)(iii) of the Income Tax Act, 1961 ["Act"] proceeded to adopt the decision rendered by it for Assessment Year ["AY"] 2009-2010. 7. According to Mr. Agarwal, learned counsel appearing for the appellant, the ITAT has clearly erred in proceeding along the aforesaid line failing to bear in mind that insofar as the AY 2009-2010 is....
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.... During the appellate proceedings, Ld. AR has filed written submissions. Main arguments of the Ld. AR are as under:- (i) The appellant and its 100% subsidiary namely M/s Unilink Engineering Pvt. Ltd. engaged in same business of manufacturing of tractor parts and accessories. Considering the appellant has 100% shareholdings, the subsidiary is completely dependent on the appellant for meeting its capital requirements. The Subsidiary is incurring heavy loss in its business over the last few years due to heavy capitalization in machineries and equipments. During the year under consideration the appellant has extended a loan of Rs. 1,53,16,455/- @ 6% per annum. As the subsidiary has utilized the funds for the purpose of its bus....
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...."the amount of the interest paid in respect of capital borrowed for the purposes of the business or profession" has to be allowed as a deduction in computing the Income-tax under section 28 of the Act. 20. In Madhav Prasad Jatia v. CIT AIR 1979 SC 1291, this Court held that the expression "for the purpose of business" occurring under the provision is wider in scope tlum the expression "for the purpose of earning income, profits or gains", and this has been the consistent view of this Court. 22. In our opinion, the decisions relating to section 37 of the Act will also be applicable to section 36(1)(Hi) because in section 37 also the expression used is "for the purpose of business". It has been consistently held in decisions....
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.... put itself in the arm-chair of the businessman or in the position of the hoard of directors anil assume the role to decide how much is reasonable expenditure having regard to the circumstances of the case. No businessman can be compelled to maximize its profit. The income tax authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own view point but that of a prudent businessman. As already stated above, we have to see the transfer of the borrowed funds to a sister concern from the point of view of commercial expediency and not from the point of view whether the amount was advanced for earning profits 35 ............. However, ....